PARIS, June 18 /PRNewswire/ -- Valeo today announced the signing of a contract with OSEO, the French state financing group dedicated to supporting innovation, for 61 million euros in funding for its research program LOwCO2MOTION(R), which aims to improve vehicle engine efficiency and contribute to reducing CO2 emissions.

This funding, granted by the French Industrial Innovation Agency (Agence de l'Innovation Industrielle, AII) which is now part of OSEO, was authorized by the European Commission on June 17.

Thierry Morin, Valeo Chairman & CEO, commented: "This funding is recognition of the work Valeo is doing to significantly reduce the CO2 emissions of vehicles. Global warming and high oil prices make this a priority for the automotive industry and Valeo is leading the development of technology solutions in this field."

The LOwCO2MOTION(R) program represents a total investment of 211.6 million euros over the period 2007-2011. Under the contract signed with OSEO, Valeo will receive 54.8 million euros (19 million in direct subsidies and the rest in repayable short-term loans). Valeo's partners are: PSA Peugeot Citroen, Batscap, IFP (Institut Francais du Petrole) and INPG (Institut National Polytechnique de Grenoble).

The program focuses on two major innovations. The first is the camless system, in which the camshaft in engines is replaced by electromagnetic actuators that operate each valve independently. By controlling residual gases, minimizing pumping losses and deactivating cylinders and valves, this technology reduces fuel consumption and pollutant emissions by 20% for gasoline engines. It also provides enhanced performance and driving comfort due to an increase in low-end engine torque. A version for diesel engines will also be developed.

The second major innovation, totally compatible with the camless system, is a next-generation mild hybrid based on Valeo's StARS+X technology. In addition to the Start-Stop function which cuts off the engine when the vehicle is at a standstill, this system features a regenerative braking function, where energy generated during braking is recovered. The program includes the development of a new high-efficiency, high-power alternator technology as well as ultracapacitors, enabling a 10 to 15% reduction in fuel consumption. These innovations will be enabled by new mechatronic technologies which are also part of the program.

Valeo is an independent industrial group dedicated to the design, production and sale of components, integrated systems and modules for cars and trucks. It is one of the world's leading automotive suppliers. The Group has 125 production sites, 62 R&D centers, 9 distribution platforms, and employs 61,300 people in 28 countries.

For more information about the Group and its activities, please visit our web site

For all additional information, please contact: Antoine Balas, Corporate Media Relations Tel: +33-1-40-55-29-36 Remy Dumoulin, Investor Relations Tel: +33-1-40-55-29-30

For all additional information, please contact: Antoine Balas, Corporate Media Relations, Tel: +33-1-40-55-29-36; Rémy Dumoulin, Investor Relations, Tel: +33-1-40-55-29-30